Buying a home can be very exciting but depending on the state of the real estate market it can present its challenges. Our recent market here in the Southeastern Michigan area has been what we call a sellers’ market.
WHAT IS A SELLER'S MARKET IN REAL ESTATE?
When buying a home, it is important to understand the different types of markets that exist. There are three common market times: seller’s market, buyer’s market, and a balanced market. A seller’s market exists when there are more buyers competing for homes than homes available to purchase. Without getting too specific we would calculate the number of months it would take the current inventory of homes to sell. When this number goes down, we shift towards a seller’s market and when this number increases, we move towards a buyer’s market.
For home sellers they love being in a seller’s market as most homes move very quickly however this time of the market is very tough for buyers. Once a buyer decides to purchase a new home being in the correct position to purchase with the right help makes all the difference.
Below are some awesome tips for buyers purchasing a home in 2019:
Get your Pre-Approval
One of the most important steps to purchasing a home regardless of the type of market is getting pre-approved. Why look at homes that you can’t afford or you’re not comfortable paying the mortgage. Before any seller looks at offers, they expect all buyers to be qualified. If you end up going up against multiple offers, then this pre-approval will make all the difference. Here at HomeCraft of Michigan we work with some amazing lenders that work when you need them not 9am – 5pm Monday – Friday.
Another big part of any agreement is the buyers down payment. If you have the money, then put a large deposit down to let sellers know you are qualified and have some money to work with if any issues come up during the escrow period. Putting down a large deposit also reduces the amount of interest you will pay over the life of the loan. When you’re looking at a 30-year mortgage this adds up quickly.
Be Ready to Work Hard
Since our current market conditions look like we will be in this seller’s market for a while longer you must be ready to see homes as soon as they hit the market. Most homes have multiple offers within the first 12-36 hours. If you are only able to see homes one day per week then you might miss out on some nice homes. In addition, a great agent can view properties for you if your schedule does now allow flexibility.
Select a Great Agent
Choosing a great agent that knows the area and has a team available to help can make all the difference. During these seller markets, it’s critical that buyer agents can accommodate your schedule when needed. Once you do find the right home this same agent will need to explain the process and make sure your offer has the best possible advantage especially when multiple offers are in hand.
Decide if you Need Contingencies
There are many reasons why sellers select certain offers over others. Most people think that it always comes down to price. We all know that price is very important however the more contingencies that your offer has the less likely it is to be accepted. For example, if you have a home to sell and the offer is contingent upon your home selling then your chances of winning a multiple offer bid are extremely low. Other contingencies that sellers don’t like to see are long inspection periods, appraisal contingencies, and extended lawyer review timeframes.
During a seller’s market when your dream home hits the market you must stay flexible. Most of the time buyers will need to offer over asking price but it does not always come down to price as mentioned above. Can you offer a flexible occupancy period, quick closing, inspection minimum, or free occupancy? All these options work great and help a seller decide what offer would work the best for them. If you’re working with a great buyer’s agent, then they will have already asked the seller the important questions so they can produce the best possible offer.
As you can see working with the right agent in this tough market can make all the difference in the world. Sometimes you just need to work with an agent that understands what is important to you plus can learn what the seller’s needs are to make a deal win/win for both sides.
Have you decided to purchase a new home in 2019? If so then reach out to us here at HomeCraft of Michigan. We are a local boutique real estate team that provides an exceptional customer experience. Most of our team has been in real estate for over 15 years and it shows. Don’t trust buying a home in this market to anyone. Here at HomeCraft of Michigan we are “Bringing the Craftsman Approach Back to Real Estate”
Call, Text, or Email us here at HomeCraft of Michigan:
734-718-8668 or email@example.com